Michigan September Online Sports Betting Heats Up, DraftKings Passes $100M: Do Profits Matter?

The state of Michigan stayed hot in September and continued its trend of being one of the largest online sports betting markets in the country.

What Happened: The state's online sports betting handle hit $354.3 million in September, according to PlayMichigan. The total was up 84.2% from the month of August and included a full month of NFL and college football betting.

The total in the state fell just shy of Michigan’s record $359.5 million in March, a figure boosted by March Madness and heavy promotional offerings.

A total of $32.5 million in retail sports betting from the three Detroit casinos gave Michigan a total of $386.8 million in bets, which set a record for the state.

Michigan’s total for the month is ahead of many states that have reported September figures. The big markets of New Jersey, Nevada, Illinois and Pennsylvania have not released September figures.

The Winners, Losers In Michigan: DraftKings Inc DKNG led the way in Michigan with $106.9 million in betting handle in September. This marked the first time a company passed the nine-digit mark in the state. DraftKings' market share was 30.2% for September.

Flutter Entertainment’s PDYPY FanDuel ranked second in Michigan with an online sports betting handle of $82.1 million.

Bet MGM, a joint venture between MGM Resorts International MGM and Entain, was third in Michigan with $81.8 million in online sports betting handle and a market share of 23.1%.

Barstool Sportsbook, a brand from Penn National Gaming PENN came in a distant fourth place with $29.5 million in sports betting handle online and a market share of 8.3%.

Caesars Entertainment Inc CZR came in fifth place with $23.9 million in September online betting handle and a market share of 6.8%.

The other major players in Michigan were PointsBet ($13.5 million), FoxBet ($5.2 million), BetRivers from Rush Street Interactive RSI ($3.4 million), WynnBet ($2.3 million) and TwinSpires ($1.6 million).

On the retail side, MGM led the way, with the MGM Grand Detroit having a handle of $13.2 million and 40.5% market share.

The Greektown Casino, in partner with Barstool, had $12 million in betting handle and a 36.8% market share, down from $54% in August and 46.9% in July.

Related Link: Why Michigan Is The Most Exciting State For Online Sports Gambling 

Online Casinos: On the online casino side of the legalized market in Michigan, BetMGM led the way with $40.6 million in handle.

DraftKings and FanDuel finished second and third, with $15.5 million and $15.4 million in casino handle, respectively.

The top five was rounded out by BetRviers at $6.7 million and Golden Nugget Online Gaming GNOG at $4.7 million.

The overall Michigan online casino market was $102.4 million in September, making Michigan only the third state (Pennsylvania, New Jersey) to hit the $100-million mark in a single month.

Do Profits Matter?: An interesting conversation can be made about how important or not important profits are to sports betting operations in a highly competitive and saturated market.

Ryan Butler from Action Network broke down the profits and losses made in September for the sports betting market:

• FanDuel: $3.2 million
• BetMGM: $2.7 million
• Barstool Sportsbook: $1 million
• FoxBet: $191,000
• BetRivers: $103,000
• Golden Nugget: -$8,500
• TwinSpires: -$160,000
• WynnBet: -$190,000
• PointsBet: -$722,000
• Caesars: -$1.6 million
• DraftKings: -$4.7 million

DraftKings had a lead in Michigan in September but it came with the company spending $7.8 million in promotions. That was the highest amount of any of the operators in the state. For comparison, BetMGM, FanDuel and Barstool spent $6.1 million, $3.9 million and $615,000, respectively, on September promos for sports betting.

Barstool Sports founder Dave Portnoy argued recently that DraftKings and FanDuel will knock each other out in a battle for customers and no focus on profitability or loyalty.

DraftKings' loss could be concerning to shareholders given the strong share taken by BetMGM and FanDuel with profits that make the two rivals attractive.

Benzinga’s Take: The big three players continued to distance themselves from the rest of the pack with DraftKings, FanDuel and BetMGM having clear market share leads in the state.

Barstool Sports ticked up to 8.3% market share, which could be a positive event with the start of football season. The operator had double-digit share in January and February before hitting lows in the 6.8% to 7.2% range in the months of June, July and August.

The profitability could give an edge to BetMGM and FanDuel and possibly make Barstool’s lower market share still attractive.

BetMGM could be a strong stock if it is spun off of its parent company, and a battle could still be coming between MGM and DKNG for control of Entain and/or BetMGM.